Page 182 - Sustainability Communication Interdisciplinary Perspectives and Theoritical Foundations

14 Corporate Sustainability Reporting 165

rating results, and prevents management from sub-optimising reporting in relation
to stakeholder preferences and reactions. Although the outside-in approach is by its
nature more reactive and adaptive than the inside-out approach, the latter may tend
to neglect some issues that are considered important by some relevant stakeholders.
Only a sufficient engagement with stakeholders and consideration of external crite-
ria schemes and requirements can ensure that the company acts in accordance with
society’s perceptions and goals.
Nevertheless, taken to its extreme, the outside-in approach implies a risk that
information is generated and reported without sufficient critical reflection on the
themes and corporate activities that are actually relevant for successful sustainable
business development. External stakeholders usually do not have sufficient knowl-
edge about production processes, product formulae, etc. to judge the main corporate
weaknesses, and to know which changes are necessary on the journey towards sus-
tainable organisation and business development. However, this does not mean that
general criteria catalogues, ratings and competitions are pointless, since they consti-
tute important drivers of sustainability reporting and often also of sustainability
management. However, with their fairly general character, they have only a limited
effect in achieving a substantial improvement in sustainability reporting and corpo-
rate sustainability since they cannot cover the necessary details of all issues relevant
to a company’s sustainable development. Therefore, we suggest embedding sustain-
ability reporting in a double-path approach that combines the strategic inside-
out approach of performance measurement and management with the outside-in
approach of adapting to the external requirements (Fig. 14.2).

Fig. 14.2 Outside-in and
inside-out approach to
sustainability reporting